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Vodafone is preparing a pay TV onslaught across Europe, planning to replicate its successful Vodafone Internet TV from its Spanish operation, initially in Italy and then in ten other European countries – “including one of the big ones.”

This was revealed by Juan Latasa, Head of Strategic Products for Vodafone Spain, speaking at the Connected TV event in London. He painted a picture of initial uncertainty with the project, saying that it had been “scrapped” twice, before finding success, but now it had acquired more customers in four months than rival Jazztel acquired in 4 years. Jazztel has jumped by about 300,000 broadband homes in the past four years, that suggests Latasa means he has picked up that many clients after four months.

Such a success would not too surprising, given how cheap the Vodafone deal is and how it is being sold, and given the parlous state of pay TV in Spain. Vodafone has taken a tip from the French IPTV players (like the one it just sold at SFR) and has tied the TV offering to its broadband line.

Spain was the only European country in 2010 which actually lost net pay TV homes, rather than increased them and the Vodafone strategy was to keep everything ultra-cheap. Cheap or free content, a set top that costs Vodafone €100 but is subsidized down to €39 for the client, and a monthly charge of €5. A further €5 needs to be paid to upgrade some broadband lines to premium. The middleware was written by French specialist WyPlay, which specializes in code for connected TVs. The content includes catch up broadcast TV from other stations including TV Espanola (TVE), the public service provider in Spain.

Effectively this is a hybrid service using DVB-T for both free to air channels with a Nagra plug in for paid services, such as GolTV and Canal+, and it has 25 new films to view for free each month (“they are old films but we try to pick good ones”) and a DNLA client that allows full movement of home movies, images and files between the TV and any DLNA device on the home WiFi connection. The device does not use a specialist video capable WiFi chip because, “we wanted to keep things simple,” but that will also mean frequent visual artefacts. However Latasa insists, “most users put the box right next to the TV set and those who cannot, use the wired Ethernet connection to the TV.”

Faultline featured the new Vodafone Internet TV Center (which the hybrid gateway set top is called) back in October when we discovered this new system, and we know this includes a Huawei wireless DSL home gateway chip, the HG533, and acts as a WiFi access point. Interestingly the device has yet to speak to tablets, but that is coming assured Latasa, and it will have DRM added so that high quality OTT content can also be added.

Vodafone has already been rumored to be working on a new hybrid service in Germany, so when Latasa says that ten new markets including one major market, it is likely to mean Germany, although it might mean the UK, another of Vodafone’s larger markets.

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